Kenya's telecommunications market continues to undergo considerable changes in the wake of increased competition, improved international connectivity, and rapid developments in the mobile market. The landing of four fibre-optic international submarine cables in recent years dramatically reduced the cost of phone calls and internet access, allowing internet services to be affordable to a far greater proportion of the population. In parallel, the sector's regulator has reduced interconnection tariffs and implemented a range of regulations aimed at developing further competition.

The incumbent fixed-line telco, Telkom Kenya, which was managed by Orange Group from 2007 until it was sold to Helios in November 2015, has struggled to make headway in the competitive market.

A simplified and converged licensing regime introduced in 2008 has lowered the barriers to market entry and increased competition by allowing operators to offer any kind of service in a technology- and service-neutral regulatory framework. Numerous competitors are rolling out national and metropolitan fibre backbone networks and wireless access networks to deliver services to population centres across the country. Several fibre infrastructure sharing agreements have been forged, and as a result the number of fibre broadband connections increased 18% in 2016, year-on-year.

Key developments:

Government cuts back on scale of second phase national broadband network project; Universal Service Fund extends mobile coverage to underserved northern regions; telecom regulator loses certain powers to the Competition Authority of Kenya; Orange Group sells its holding in Telkom Kenya to Helios; merger and acquisition activity continuing among second-tier telcos; mobile operators enter the fibre market; report update includes the regulator's market data to December 2016, operator data to Q4 2016, recent market developments.